Sunday, July 27, 2014

Undocumented Children and the
War on Drugs

With children, often quite
young, flooding the border with Mexico the media are having a field
day with heartrending stories about the little ones coming here
unaccompanied by parents or close relatives. But there is little
interest in asking why parents are willing to send their children
across thousands of miles of dangerous, illegal travel. What happened
to make life in Central America, in Honduras, Guatemala and El
Salvador so terribly unsafe?

The short answer is: war –
the war on drugs.

That war begins with strong and
sustained demand for cocaine and other illegal drugs in the United
States. Our inability to face up to this national epidemic is where
the crisis for small children begins in Central America. Why is drug
use so very common? Why are there so many Americans for whom
ordinary, everyday life is so abhorrent that they can bear it only
when they are high? We not only have no answers to these questions.
We are afraid to ask them.

While administrations in
Washington come and go and different "experts" advise the
different governments, the war on drugs continues unabated and is
being fought with progressively more sophisticated weapons and larger
outlays of money. America responds to the continuing demand for drugs
by buying more helicopters and guns and sending more troops and
narco-agents to Central America and Mexico.

Until 2007 or so most drugs
were moved by air or by sea. Then the war on drugs became intensified
and drugs needed to be moved, often in small quantities, overland
through Central America and Mexico.

As a consequence we have
brought what amounts to a civil war to several Central American
countries and to Mexico. The war on drugs consists of pitched
military battles between different governments and their police
forces and the heavily armed drug cartels. So far, the battles seems
to be a draw at best. Certainly government forces are not winning.
Police and military units are often subverted through lavish bribes
which far exceed what their
governments can afford to pay.

The economies in Central
America and in Mexico are feeble at best. There are not nearly enough
jobs. Poverty rates are very high. For many, working for the drug
cartels seems to be the only or, at least, the best option. They join
the army of the drug traffickers. Their job is to kill or be killed.
The war on drugs destroys local economies and thus forces more people
to join either side in that conflict. They become professional
killers.

The continued ability of drug
cartels to hold governments and the US financed and supported
militaries at bay undermines the legitimacy of governments.
Law-enforcement becomes feeble. Murder rates rise precipitously.
Citizens hide anxiously in their houses and are afraid to go out at
night. At the same time, many of the most notorious drug gang members
were at one time members of Central American militaries. As such the
United States government trained them to be efficient and
cold-blooded killers at the School of the Americas at Fort Benning,
GA.

All of this increasing violence
is not only planned and financed in large part by our government. But
there are persistent reports that American Marines and DEA agents
actually conduct raids in Central America. We are a major partner in
this civil crusade in Central America and Mexico.

As this war over drugs
continues, levels of violence only go up. In recent years, during the
presidency of Felipe Calderon, a joint US – Mexico anti-drug effort
managed to arrest or kill the heads of several important drug
cartels. But what may have appeared to be a success, only resulted in
the splintering of drug trafficking organizations and with it a much
intensified warring between different groups, each aiming to expand
its reach. At the same time, criminal organizations discovered a new
source of income: kidnapping and ransoming of the wealthy. The public
reacted with the formation of citizen militias aim to protect
themselves and violence escalated more.

The children flooding the
Mexico – US border need help today. But we need to also consider
the larger context of this crisis. It is a clear indication that the
war on drugs conducted by the military and the intelligence apparatus
of the US government and its industrial suppliers is a colossal
failure.

It should be ended immediately.

The money given to Central
American militaries should be diverted to services for addicts at
home. Many of them, today, who would like help breaking their habits
cannot find the services they need. We must do what we can to reduce
demand for drugs here here at home and reduce the violence to the war
on drugs.

Sunday, July 20, 2014

Americans and Class

Americans do not like to think
about class. If you raise a class issue, conservatives will accuse
you of preaching class war. The left lumps all different classes
together under the label all the "99%". Very important
differences between different segments of the American population are
thereby being obscured and ignored.

College
graduations still being
in recent memory, I can
draw my illustrations from different college graduates. There are the
young men and women whose family have a bit of disposable income.
After they graduate college, they could look around for work they
really want to do. They can spend a year or two trying to make a
documentary, or perhaps traveling widely. They can accept unpaid
internships in Washington, D. C. that may pave the way to interesting
future employment but leave them, in the present, depending on money
from their parents.

Compare them to other college
graduates who have been studying and working part-time or even
full-time jobs and have always been on the edge of being flat broke.
I recall a student who explained his absence from class by saying
that payday was still two days away when he ran out of gas money. He
didn't have the money to drive to school. These students must get as
well-paying a job as possible as soon as they graduate. Whether it is
work they like to do is clearly secondary, as long as it pays a
decent salary. No unpaid internships for them.

Then there are the students who
failed to graduate because halfway through their college years, major
illness or unexpected unemployment in the family demanded that they
get a full-time job immediately and therefore end their studies.

Different again are the young
people who do not only struggle with very limited finances but also
confront by racial hostilities and distrust. Many of them have to
struggle with family and social challenges unknown to some of the
other groups. Their rate of unemployment tends to be much higher than
that of more affluent white young people as is the likelihood that
they spend time in prison.

These are just a few examples
of the distinctions between different class groupings in our
population. They grow up with very different ranges of opportunities.
Their needs are different from those of the other groups, as are
their problems and what they can hope for. The young men and women
who aspire to a political career or to work in the public sector can
move in that direction if they can afford to work for nothing as
interns. Those with more limited finances or those faced by racial
prejudices are more likely to advance themselves by entering the
military. If they survive, their future may be more stable than that
of their parents but "fulfilling work" is still very hard
to come by.

Seeing the diversity of the
American people clearly is extremely important in many different
contexts. It serves to show up the dishonesty of our politicians who
constantly talk about "what the American people want"
or ho lump all of us together as the "middle class." Different parts of the American people want very different things
because their lives are affected by the problems of belonging to
different class segments.

Hence also projects to create
more jobs, for instance, by cutting taxes on the rich, are badly
thought out. These different class segments tend to have different
sorts of jobs. Different kinds of jobs are created in different ways.
There is no way in which we can simply "create more jobs."
We need to be clear for whom jobs are to be created.

Crime rates fluctuate. When
they go up, politicians will come up with crime-fighting projects.
But those have very different effects on different classes. They tend
to come down hardest on the people whose lives are most difficult and
leave those whose life prospects are better relatively unaffected.
There are no crime-fighting projects that affect all citizens
equally.

Yes, there are these small
number of Americans who own large chunks of the economy and then they
are the rest of us. But the life chances among the rest of us are
very different for different groups. The likelihood that we may have
some influence on the political process is very different for
different groups. The probability that the government will alter
institutions in our favor is very different for different class
segments. The likelihood that we will have jobs that are satisfying
to us, is very different for different class sections. The likelihood
that we can live pretty autonomous lives rather than be constantly
supervised by parole officers, social workers, and other government
employees are much better for some of us than for others.

Lumping the 99% together
obscures the many different and very real ways in which different
subgroups experience their fiscal and social lives. If
justice is your concern, you need to pay close attention to the many
divisions in our populace.

Monday, July 14, 2014

What free market?

A significant number of the
elderly suffer from macular degeneration, a gradual destruction of
the retina of the eye ending in blindness. As persons age, more blood
vessels develop in the retina and disturb the eyes' visual
functioning.

In some cancers, similarly, new
blood vessels develop to enhance the growing cancer. Pharmaceutical
researchers have developed some medications that stop this
development of blood flow to the growing cancer. Virtually the same
drug in much smaller doses, has proved useful to retard the progress
of macular degeneration. It inhibits the progressive
loss of visual acuity in the patient.

All of this is an encouraging
story of the contribution of pharmaceuticals to maintaining the
quality of life in the elderly.

This story is also interesting
from an economic point of view. It turns out that one of the big
Pharma firm, Genentech, sells the drug that is to be injected into
the eye at 100 times the price of what they charge for the same drug
to be used, in much larger doses, on cancers. Yes, you read that
right: for virtually the same medication, this company charges 100
times the price for an application to the eye from what it charges
when the drug is used in combating cancer. The anti-blindness
injection may cost as much as $2000.

As a consequence, Medicare is
said to spend between one and $2 billion a year for this treatment,
"roughly 10% of Medicare part B drug expenditures." (JAMA,
Journal of the American Medical Association,
July 2, 2014).

How can they get away with
that?

Here is the story economists
tell us about free markets: in a free market everybody competes with
everyone else to get a high return on the capital they have invested
in their business. If someone has an exorbitantly high rate of
profit, someone else will enter this same line of business and so
will more entrepreneurs until the profits in this particular business
are at
just the same level as anywhere else in the economy. Extraordinary
profits are temporary phenomena, soon to be cut down to prevailing
profit rates through competition.

But pharmaceuticals are not
sold in a free market. To begin with you cannot sell medications
without government approval. In other words entry into a particular
market is restricted by government protections for consumers. You may
be the only firm able to sell this drug because no one else has the
FDA permit. In that case you can do what Genentech does and charge
absolutely outrageous prices.

In addition, medications are
protected by patents. Competitors who would like to ride the same
gravy train as Genentech, will have to develop a drug that does not
violate Genentech's patents. It must be essentially the same drug but
enough different to avoid patent problems. In
the pharmaceuticals trade that's known as a “me-too” medication.

Both FDA supervision and patent
protection are eminently sensible. But they create a situation where
medications are not sold in a free market.

None of this has to be a
terribly difficult problem. The bulk if not all of the macular
degeneration medicines are paid for by Medicare. Medicare is
therefore in a very strong position to negotiate a more sensible
price for these medicines. After all if Medicare said: these macular
degeneration drugs are much too expensive. We we can no longer afford
to pay for them, Genentech would lose most if not all of its
business. It is very much in their interest to come to an
accommodation with Medicare.

Other countries such as Canada
or some of the European health services regularly negotiate favorable
prices for the medicines they buy in very large quantities.

The problem with that approach
is that Congress, in its infinite wisdom, and ignorance of the most
basic features of our economy, explicitly forbade Medicare to
negotiate drug prices. That, they thought would harm the free market.

That's how much Congress knows,
or how much of our representatives were paid to allow the
pharmaceutical companies to continue to make sky high profits.

As long as our representatives
are, in fact, for sale, large companies, such as drug companies, will
be able to rob
the taxpayers blind for the sake of their own stockholders.

Saturday, July 5, 2014

Equality

About 180 years ago, in the
early 1830s, Alexis DeTocqueville, a French aristocrat, came to the
United States to watch a democracy being constructed from scratch. A
new country was being built by immigrants mostly from western Europe.
They were indebted to their home countries but were also much more
independent in constructing a new society than were the Europeans who
remained behind.

This country, DeTocqueville
found, was obsessed with the idea of equality. Because all were
equal, everyone's decision had the same weight. Everyone was entitled
to participate in collective decision-making. Decision-making was
democratic and everyone was busy participating. DeTocqueville keeps
commenting on the "hustle and bustle" of American life.
Everyone came to meetings; between meetings everyone was talking
about local improvement projects or issues of national policy. A new
country was being built and everyone participated.

The level of participation in
our country has changed a great deal for many different reasons. But
obviously equality is still a major concern, witness the struggle for
racial equality, for gender equality and now for equal treatment
regardless of sexual preferences. Equality is not only a central
theme of our national life. It remains a continuing challenge. We all
know that.

But equality does not only
promote democracy, it also promotes conformism, the strong pressure
for everyone to have the same opinion, to live their life along the
same patterns, to embrace the same values and opinions. The high
value placed on equality producers the tyranny of the majority.
Wherever there is a disagreement over policy, over morality, over the
rules governing individual behavior, the majority will feel justified
in criticizing and rejecting what a minority of citizens believes.

The high value placed on
equality
therefore moves us in contradictory directions. On the one hand, it
encourages everyone to participate in public affairs. On the other
hand, it disenfranchises any views which are not those
of the majority.

This pressure for conformity in
America used to be a topic of public conversation. Sinclair Lewis
documented it in novels such as
Main Street
(12920) and Babbit
(1922). During
the 1950s a number of widely
read books like The
Man in the Gray Flannel Suit occasioned
much public complaint about the pressures for conformity.

Interestingly
enough that concern about the pressure to conform was quite
halfhearted. While conformism was a topic of public conversation,
conservatives conducted a successful campaign for rooting out
Communists and other leftists from government service, academia, the
movie industry. No one regarded this campaign to eradicate one kind
of political view as an example of the tyranny of the majority.

It
is not hard to see why the high value placed on equality produces
such contradictory phenomena. Yes, we are all equal and therefore
entitled to our own beliefs and values. But the community has a right
to not only disapprove of certain values and behaviors but also to
prohibit and punish them. While each of us has the right to shape our
lives as we see best, our community has the obligation to prohibit
certain kinds of behavior. Molesting small children, defrauding
unsuspecting investors with securities that are worthless,
overworking and underpaying one's employees and many other
destructive behaviors are unacceptable and should be punished.

But
that only intensifies the internal contradictions of an egalitarian
society. As a group we have an obligation to protect our children, or
to protect the elderly against fraudulent investment counselors. Is
the rooting out of communists a legitimate exercise of community
self-government? What about the laws passed in many states which
defined marriage as between one man and one woman? When is a
community exercising its political rights at legislating acceptable
behavior and when is it illegitimately imposing the opinions of the
many on smaller groups who have a perfect right to choose for
themselves how to act and how to live?

This
is the dilemma a country experiences when it values equality above
everything. DeTocqueville proved himself very perceptive when he
identified this dilemma.

At
the same time the problem is not insurmountable. In a democracy
public debates not only concern the policy issues of the day, but
also the very
meaning of equality.
Specifically, citizens must decide in what respects we are all equal.
The Tocqueville, for
instance,
speaks in laudatory terms about "universal suffrage" in the
United States, oblivious to the fact that, at the time, only white
men were allowed to participate in political decision-making. We have
since then, after a great deal of conflict,--a good deal of it
bloody-- decided that everyone, irrespective of race or gender,
should be able to vote and run for political office. Similarly, what
areas constitute a person's private domain, and what areas are to be
regulated and supervised by public authorities, must be decided by a
people which allows everyone equal rights of political participation.

The central task equality
imposes on all of us is to define what that equality means which we
regard as so important.

Many Americans ranging from
ordinary citizens to presidents and their cabinet members do not
understand this. High government officials from the United States
regularly travel abroad and urge other countries to adopt an
electoral democracy like ours. But if we took the idea of equality
seriously, surely we would understand that other countries must
decide for themselves how they will govern themselves. That is what a
democratic stance demands. But we act as if equality meant that
everybody must be like us, that we must all be the same.

It
is time for us to be serious about equality and to acknowledge that
it allows different people to lead their lives in different ways. We
can all agree that terrorism is an unacceptable policy choice. But we
must recognize that electoral democracy is not for every one. If we
value democracy we must allow others to govern themselves, and to do
that in ways of their own choosing.